Down on the farm

1 May 2019

Sara Bonavia considers the income tax aspects of loss relief for farmers

As well as being governed by the normal loss relief rules for trading businesses, additional rules apply in respect of farming trades. Providing a farmer’s trade meets the normal commerciality tests, these additional rules can offer benefits, such as the ability to average their profits over two or five years (thus giving relief against significant annual fluctuations). The rules can also be restrictive, such as where the five year rule denies sideways loss relief if losses have arisen in the five consecutive previous tax years. This article considers the income tax aspects of loss relief for farmers.

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About the author

Sara Bonavia

Sara has over 15 years’ experience advising private individuals, unincorporated businesses and trusts on their tax affairs, and her specialities include handling and resolving HMRC investigations. Sara qualified as a Chartered Tax Adviser in 2007 and is also a Fellow of the Association of Taxation Technicians. Sara has contributed to other tax publications with articles, sharing her knowledge and experience.